The Karhunen–Loeve transform (KLT) is used to retrieve the wavelength information of several fiber Bragg gratings (FBGs) that are acting as a multiplexed sensor. The modulated light of a broadband source is launched to the FBG cascade in order to capture the electrical frequency response of the system. Thanks to dispersive media, the wavelengths of the FBGs are mapped in radio-frequency delays. Wavelength changes are determined by the amplitude change of the samples in the impulse response, a change which is followed by the eigenvalue calculated by the KLT routine. The use of the KLT routine reduces by three orders of magnitude the amount of points needed to have a subdegree resolution in temperature sensing, while keeping the accuracy almost intact.